High-net-worth individuals and Non-Resident Indians (NRIs) are significantly increasing their investments in Category III Alternate Investment Funds (AIFs) in India. These funds, which employ sophisticated strategies like hedging with derivatives for risk management, have amassed ₹1.7 lakh crore by September 30, 2025. This represents a substantial growth from previous years, driven partly by tax advantages for funds located in GIFT City, and signals a strong investor preference for alternative avenues to navigate market volatility and achieve balanced returns.